8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 21, 2015

DISCOVER FINANCIAL SERVICES

(Exact name of registrant as specified in its charter)

Commission File Number: 001-33378

Delaware	36-2517428
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

2500 Lake Cook Road, Riverwoods, Illinois 60015

(Address of principal executive offices, including zip code)

(224) 405-0900

(Registrant's telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On April 21, 2015, Discover Financial Services (the “Company”) released financial information with respect to the quarter ended March 31, 2015. Copies of the press release, financial data supplement and financial results presentation containing this information are attached hereto as exhibits and incorporated herein by reference.

The information contained in this Item 2.02 of this Current Report on Form 8-K, including the exhibits, is furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly stated by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Press Release of the Company dated April 21, 2015 containing financial information for the quarter ended March 31, 2015
99.2	Financial Data Supplement of the Company for the quarter ended March 31, 2015
99.3	Financial Results Presentation of the Company for the quarter ended March 31, 2015

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DISCOVER FINANCIAL SERVICES
Dated: April 21, 2015	By:	/s/ D. Christopher Greene
		Name: D. Christopher Greene
		Title: Vice President, Deputy General Counsel and Assistant Secretary

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release of the Company dated April 21, 2015 containing financial information for the quarter ended March 31, 2015
99.2	Financial Data Supplement of the Company for the quarter ended March 31, 2015
99.3	Financial Results Presentation of the Company for the quarter ended March 31, 2015

EX-99.1

Exhibit 99.1

DISCOVER FINANCIAL SERVICES REPORTS FIRST QUARTER NET INCOME OF $586 MILLION

OR $1.28 PER DILUTED SHARE

Riverwoods, IL, April 21, 2015 - Discover Financial Services (NYSE: DFS) today reported net income of $586 million or $1.28 per diluted share for the first quarter of 2015, as compared to $631 million or $1.31 per diluted share for the first quarter of 2014. The company's return on equity for the first quarter of 2015 was 21%.

First Quarter Highlights

• Total loans grew $3.8 billion, or 5.9%, from the prior year to $67.6 billion.

• Credit card loans grew $2.6 billion, or 5.1%, to $53.5 billion and Discover card sales volume increased 2.7% from the prior year.

• Net charge-off rate for credit card loans increased 8 basis points from the prior year to 2.40% and the delinquency rate for loans over 30 days past due decreased 8 basis points to 1.64%.

• Payment Services transaction dollar volume for the segment was $50.2 billion, down 1% from the prior year.

"We achieved solid loan growth and recently launched our new Discover it Miles card leveraging our strengths in rewards and service," said David Nelms, chairman and CEO of Discover. "We continue to generate a strong return on equity and announced plans to increase share repurchases and dividends."

Segment Results:

Direct Banking

Direct Banking pretax income of $881 million in the quarter was down $113 million, or 11%, driven primarily by higher provisioning for loan losses due to growth.

Total loans ended the quarter at $67.6 billion, up 6.0% compared to the prior year. Credit card loans ended the quarter at $53.5 billion, up 5.1% from the prior year. Personal loans increased $755 million, or 17.5%, from the prior year and private student loans increased $324 million, or 3.9%, from the prior year. Excluding purchased student loans, private student loans grew $851 million, or 19.7%, from the prior year.

Revenue net of interest expense increased $98 million, up 5% from the prior year.

Net interest income increased $66 million, or 4%, from the prior year, benefiting from loan growth partially offset by margin compression. Net interest margin was 9.70%, down 18 basis points from the prior year primarily due to a decline in card yield and an increase in funding costs. Credit card yield was 12.05%, a decrease of 9 basis points from the prior year due to portfolio mix. Interest expense as a percent of total loans increased 8 basis points from the prior year as the company continues to extend funding duration.

Other income increased $32 million, or 7%, from the prior year as higher direct mortgage related income and interchange revenue were partially offset by lower protection products revenue.

The delinquency rate for credit card loans over 30 days past due was 1.64%, down 8 basis points from the prior year and down 9 basis points from the prior quarter. Credit card net charge-off rate for the first quarter was 2.40%, up 8 basis points from the prior year and up 14 basis points from the prior quarter. The student loan net charge-off rate excluding purchased credit-impaired ("PCI") loans was 1.03%, down 28 basis points from the prior year. The personal loans net charge-off rate of 2.22% increased by 15 basis points from the prior year.

Provision for loan losses of $388 million increased $118 million from the prior year. Net charge-offs increased $31 million due primarily to several years of consistent loan growth. The reserve build for the first quarter of 2015 was $28 million due mainly to seasoning of loan growth, versus a $59 million reserve release in the prior year.

Expenses increased $93 million, or 13%, from the prior year. Professional fees increased in part due to costs associated with anti-money laundering and related compliance program enhancements. Employee compensation and marketing also contributed to the increase in expenses, as well as higher legal reserves.

Payment Services

Payment Services pretax income was $27 million in the quarter, down $1 million from the prior year. Payment Services dollar volume was $50.2 billion, down 1% from the prior year. PULSE transaction dollar volume was down 3% year-over-year. Network Partners volume was up $568 million, or 24% from the prior year as AribaPay volume more than offset the previously communicated loss of volume from a third party payments partner.

Share Repurchases

During the first quarter of 2015, the company repurchased approximately 6 million shares of common stock for $360 million. Shares of common stock outstanding declined by 1% from the prior quarter.

Conference Call and Webcast Information

The company will host a conference call to discuss its first quarter results on Tuesday, April 21, 2015, at 4:00 p.m. Central time. Interested parties can listen to the conference call via a live audio webcast at

http://investorrelations.discoverfinancial.com.

About Discover

Discover Financial Services (NYSE: DFS) is a direct banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company issues the Discover card, America's cash rewards pioneer, and offers private student loans, personal loans, home loans, checking and savings accounts, certificates of deposit and money market accounts through its direct banking business. It operates the Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in more than 185 countries and territories. For more information, visit www.discover.com/company.

Contacts:

Investors:

Bill Franklin, 224-405-1902

williamfranklin@discover.com

Media:

Jon Drummond, 224-405-1888

jondrummond@discover.com

A financial summary follows. Financial, statistical, and business related information, as well as information regarding business and segment trends, is included in the financial supplement filed as Exhibit 99.2 to the company's Current Report on Form 8-K filed today with the Securities and Exchange Commission (“SEC”). Both the earnings release and the financial supplement are available online at the SEC's website (http://www.sec.gov) and the company's website (http://investorrelations.discoverfinancial.com).

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements, which speak to our expected business and financial performance, among other matters, contain words such as “believe,”“expect,”“anticipate,”“intend,”“plan,”“aim,”“will,”“may,”“should,”“could,”“would,”“likely,” and similar expressions. Such statements are based upon the current beliefs and expectations of the company's management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements. These forward-looking statements speak only as of the date of this press release, and there is no undertaking to update or revise them as more information becomes available.

The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: changes in economic variables, such as the availability of consumer credit, the housing market, energy costs, the number and size of personal bankruptcy filings, the rate of unemployment, the levels of consumer confidence and consumer debt, and investor sentiment; the impact of current, pending and future legislation, regulation, supervisory guidance, and regulatory and legal actions, including, but not limited to, those related to financial regulatory reform, consumer financial services practices, anti-corruption, and funding, capital and liquidity; the actions and initiatives of current and potential competitors; the company's ability to manage its expenses; the company's ability to successfully achieve card

acceptance across its networks and maintain relationships with network participants; the company's ability to sustain and grow its private student loan portfolio and mortgage loan products; losses as a result of mortgage loan repurchase and indemnification obligations to secondary market purchasers; difficulty obtaining regulatory approval for, financing, closing, transitioning, integrating or managing the expenses of acquisitions of or investments in new businesses, products or technologies; the company's ability to manage its credit risk, market risk, liquidity risk, operational risk, compliance and legal risk, and strategic risk; the availability and cost of funding and capital; access to deposit, securitization, equity, debt and credit markets; the impact of rating agency actions; the level and volatility of equity prices, commodity prices and interest rates, currency values, investments, other market fluctuations and other market indices; losses in the company's investment portfolio; limits on the company's ability to pay dividends and repurchase its common stock; limits on the company's ability to receive payments from its subsidiaries; fraudulent activities or material security breaches of key systems; the company's ability to remain organizationally effective; the company's ability to increase or sustain Discover card usage or attract new customers; the company's ability to maintain relationships with merchants; the effect of political, economic and market conditions, geopolitical events and unforeseen or catastrophic events; the company's ability to introduce new products or services; the company's ability to manage its relationships with third-party vendors; the company's ability to maintain current technology and integrate new and acquired systems; the company's ability to collect amounts for disputed transactions from merchants and merchant acquirers; the company's ability to attract and retain employees; the company's ability to protect its reputation and its intellectual property; and new lawsuits, investigations or similar matters or unanticipated developments related to current matters. The company routinely evaluates and may pursue acquisitions of or investments in businesses, products, technologies, loan portfolios or deposits, which may involve payment in cash or the company's debt or equity securities.

Additional factors that could cause the company's results to differ materially from those described in the forward-looking statements can be found under “Risk Factors,”“Business - Competition,”“Business - Supervision and Regulation” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in the company's Annual Report on Form 10-K for the year ended December 31, 2014 which is filed with the SEC and available at the SEC's internet site (http://www.sec.gov).

EX-99.2

DISCOVER FINANCIAL SERVICES																					Exhibit 99.2
EARNINGS SUMMARY
(unaudited, in millions, except per share statistics)
	Quarter Ended
	Mar 31, 2015			Dec 31, 2014			Sep 30, 2014			Jun 30, 2014			Mar 31, 2014			March 31, 2015 vs. March 31, 2014
EARNINGS SUMMARY
Interest Income		$1,929			$1,974			$1,926			$1,863			$1,833			$96		5	%
Interest Expense	300			302			288			274			270			30			11	%
Net Interest Income	1,629			1,672			1,638			1,589			1,563			66			4	%
Discount/Interchange Revenue	536			620			599			595			519			17			3	%
Rewards Cost	268			517			304			268			265			3			1	%
Discount and Interchange Revenue, net	268			103			295			327			254			14			6	%
Protection Products Revenue	71			75			78			78			83			(12		)	(14	%)
Loan Fee Income	81			86			85			80			83			(2		)	(2	%)
Transaction Processing Revenue	42			46			46			46			44			(2		)	(5	%)
Other Income	80			55			48			52			51			29			57	%
Total Other Income	542			365			552			583			515			27			5	%
Revenue Net of Interest Expense	2,171			2,037			2,190			2,172			2,078			93			4	%
Provision for Loan Losses	390			457			354			360			272			118			43	%
Employee Compensation and Benefits	331			314			320			301			307			24			8	%
Marketing and Business Development	182			216			182			168			169			13			8	%
Information Processing & Communications	88			88			87			87			84			4			5	%
Professional Fees	127			128			111			112			99			28			28	%
Premises and Equipment	24			24			23			22			23			1			4	%
Other Expense	121			162			104			107			102			19			19	%
Total Other Expense	873			932			827			797			784			89			11	%
Income Before Income Taxes	908			648			1,009			1,015			1,022			(114		)	(11	%)
Tax Expense	322			244			365			371			391			(69		)	(18	%)
Net Income		$586			$404			$644			$644			$631			($45	)	(7	%)
Net Income Allocated to Common Stockholders		$573			$392			$630			$630			$618			($45	)	(7	%)
Effective Tax Rate	35.5		%	37.7		%	36.2		%	36.6		%	38.3		%
Net Interest Margin	9.69		%	9.76		%	9.78		%	9.84		%	9.87		%	(18		)	bps
Operating Efficiency	40.2		%	45.8		%	37.8		%	36.7		%	37.7		%	248			bps
ROE	21		%	14		%	23		%	23		%	23		%
Ending Common Shares Outstanding	445			449			455			465			468			(23		)	(5	%)
Weighted Average Common Shares Outstanding	448			452			460			466			471			(23		)	(5	%)
Weighted Average Common Shares Outstanding (fully diluted)	448			453			461			467			472			(24		)	(5	%)
PER SHARE STATISTICS
Basic EPS		$1.28			$0.87			$1.37			$1.35			$1.31			($0.03	)	(2	%)
Diluted EPS		$1.28			$0.87			$1.37			$1.35			$1.31			($0.03	)	(2	%)
Common Stock Price (period end)		$56.35			$65.49			$64.39			$61.98			$58.19			($1.84	)	(3	%)
Book Value per share		$25.22			$24.79			$24.82			$24.46			$23.53			$1.69		7	%
Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES
EARNINGS SUMMARY
(unaudited, in millions)
	Quarter Ended
	Mar 31, 2015		Dec 31, 2014		Sep 30, 2014		Jun 30, 2014		Mar 31, 2014		March 31, 2015 vs. March 31, 2014
SEGMENT- INCOME BEFORE INCOME TAXES
Direct Banking		$881		$646		$981		$984		$994		($113	)	(11	%)
Payment Services	27		2		28		31		28		(1		)	(4	%)
Total		$908		$648		$1,009		$1,015		$1,022		($114	)	(11	%)
TRANSACTIONS PROCESSED ON NETWORKS
Discover Network	456		523		522		514		461		(5		)	(1	%)
PULSE Network	1,024		1,085		1,071		1,090		1,037		(13		)	(1	%)
Total	1,480		1,608		1,593		1,604		1,498		(18		)	(1	%)
NETWORK VOLUME
PULSE Network		$40,814		$41,788		$40,636		$41,500		$41,927		($1,113	)	(3	%)
Network Partners	2,949		2,263		2,185		2,617		2,381		568			24	%
Diners Club International 1	6,474		6,933		6,777		6,733		6,527		(53		)	(1	%)
Total Payment Services	50,237		50,984		49,598		50,850		50,835		(598		)	(1	%)
Discover Network - Proprietary	27,324		32,005		30,577		30,342		26,547		777			3	%
Total		$77,561		$82,989		$80,175		$81,192		$77,382		$179		0	%
1 Volume is derived from data provided by licensees for Diners Club branded cards issued outside of North America and is subject to subsequent revision or amendment
Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES
BALANCE SHEET STATISTICS
(unaudited, in millions)
	Quarter Ended
	Mar 31, 2015			Dec 31, 2014			Sep 30, 2014			Jun 30, 2014			Mar 31, 2014			March 31, 2015 vs. March 31, 2014
BALANCE SHEET SUMMARY
Assets
Cash and Investment Securities		$14,701			$11,339			$11,480			$11,254			$13,858			$843		6	%
Total Loan Receivables	67,648			69,969			67,366			65,875			63,852			3,796			6	%
Allowance for Loan Losses	(1,776		)	(1,746		)	(1,644		)	(1,614		)	(1,591		)	(185		)	(12	%)
Net Loan Receivables	65,872			68,223			65,722			64,261			62,261			3,611			6	%
Premises and Equipment, net	678			670			661			665			668			10			1	%
Goodwill and Intangible Assets, net	432			433			461			463			466			(34		)	(7	%)
Other Assets	2,495			2,461			2,272			2,294			2,331			164			7	%
Total Assets		$84,178			$83,126			$80,596			$78,937			$79,584			$4,594		6	%
Liabilities & Stockholders' Equity
Direct to Consumer and Affinity Deposits		$29,303			$28,766			$28,830			$28,739			$28,711			$592		2	%
Brokered Deposits and Other Deposits	17,124			17,323			16,552			15,706			16,273			851			5	%
Deposits	46,427			46,089			45,382			44,445			44,984			1,443			3	%
Borrowings	23,090			22,657			21,057			20,177			20,306			2,784			14	%
Accrued Expenses and Other Liabilities	3,450			3,246			2,856			2,934			3,273			177			5	%
Total Liabilities	72,967			71,992			69,295			67,556			68,563			4,404			6	%
Total Equity	11,211			11,134			11,301			11,381			11,021			190			2	%
Total Liabilities and Stockholders' Equity		$84,178			$83,126			$80,596			$78,937			$79,584			$4,594		6	%
LIQUIDITY
Liquidity Portfolio		$14,162			$10,752			$10,944			$10,337			$12,141			$2,021		17	%
Undrawn Credit Facilities 1	24,340			23,524			22,877			22,964			22,284			2,056			9	%
Total Liquidity		$38,502			$34,276			$33,821			$33,301			$34,425			$4,077		12	%
BALANCE SHEET STATISTICS
Total Common Equity		$10,651			$10,574			$10,741			$10,821			$10,461			$190		2	%
Total Common Equity/Total Assets	12.7		%	12.7		%	13.3		%	13.7		%	13.1		%
Total Common Equity/Net Loans	16.2		%	15.5		%	16.3		%	16.8		%	16.8		%
Tangible Assets		$83,746			$82,693			$80,135			$78,474			$79,118			$4,628		6	%
Tangible Common Equity 2		$10,219			$10,141			$10,280			$10,358			$9,995			$224		2	%
Tangible Common Equity/Tangible Assets 2	12.2		%	12.3		%	12.8		%	13.2		%	12.6		%
Tangible Common Equity/Net Loans 2	15.5		%	14.9		%	15.6		%	16.1		%	16.1		%
Tangible Common Equity per share  2		$22.99			$22.58			$22.57			$22.26			$21.34			$1.65		8	%
REGULATORY CAPITAL RATIOS	Basel III Transition			Basel I
Total Risk Based Capital Ratio 3	17.6		%	17.0		%	17.8		%	18.3		%	18.1		%
Tier 1 Risk Based Capital Ratio 3	15.6		%	14.9		%	15.6		%	16.0		%	15.8		%
Tier 1 Common Capital Ratio 3,4	N/A			14.1		%	14.8		%	15.2		%	14.9		%
Tier 1 Leverage Ratio 3	13.3		%	13.2		%	13.7		%	14.0		%	13.4		%
Common Equity Tier 1 Capital Ratio 3	14.8		%	N/A			N/A			N/A			N/A
	Basel III Fully Phased-in
Common Equity Tier 1 Capital Ratio 5	14.7		%	14.1		%	14.7		%	N/A			N/A
1  Excludes investments pledged to the Federal Reserve, which is included within the liquidity portfolio
2   Tangible Common Equity ("TCE") is a non-GAAP measure. The Company believes TCE is a more meaningful measure to investors of the net asset value of the Company. For corresponding reconciliation of TCE to a GAAP financial measure see Reconciliation of GAAP to non-GAAP Data schedule
3 As of January 1, 2015 regulatory capital ratios are calculated under Basel III rules subject to transition provisions. The Company reported under Basel I at December 31, 2014, September 30, 2014, June 30, 2014 and March 31, 2014
4 Tier 1 Common Capital Ratio (under Basel I) is calculated using tier 1 common capital, a non-GAAP measure. The Company believes the tier 1 common capital ratio is meaningful to investors to assess the quality and composition of the Company’s capital. For corresponding reconciliation of tier 1 common capital to a GAAP financial measure see Reconciliation of GAAP to non-GAAP Data schedule
5 Common Equity Tier 1 Capital Ratio (Basel III fully phased-in) is calculated using Basel III fully phased-in common equity tier 1 capital, a non-GAAP measure. The Company believes that the common equity tier 1 capital ratio based on fully phased-in Basel III rules is an important complement to the existing capital ratios and for comparability to other financial institutions. For the corresponding reconciliation of common equity tier 1 capital and risk weighted assets calculated under fully phased-in Basel III rules to common equity tier 1 capital and risk weighted assets calculated under Basel III transition rules see the Reconciliation of GAAP to non-GAAP data schedule
Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES
AVERAGE BALANCE SHEET
(unaudited, in millions)
	Quarter Ended
	Mar 31, 2015			Dec 31, 2014			Sep 30, 2014			Jun 30, 2014			Mar 31, 2014			March 31, 2015 vs. March 31, 2014
AVERAGE BALANCES
Assets
Cash and Investment Securities		$12,148			$11,886			$10,742			$11,037			$11,244			$904		8	%
Restricted Cash	605			242			498			563			1,768			(1,163		)	(66	%)
Credit Card Loans	54,038			54,169			53,130			51,718			51,347			2,691			5	%
Private Student Loans	8,721			8,478			8,310			8,301			8,377			344			4	%
Personal Loans	5,047			4,954			4,718			4,426			4,259			788			19	%
Other Loans	342			329			323			283			244			98			40	%
Total Loans	68,148			67,930			66,481			64,728			64,227			3,921			6	%
Total Interest Earning Assets	80,901			80,058			77,721			76,328			77,239			3,662			5	%
Allowance for Loan Losses	(1,753		)	(1,676		)	(1,625		)	(1,599		)	(1,678		)	(75		)	(4	%)
Other Assets	4,439			4,303			4,289			4,253			4,271			168			4	%
Total Assets		$83,587			$82,685			$80,385			$78,982			$79,832			$3,755		5	%
Liabilities and Stockholders' Equity
Direct to Consumer and Affinity Deposits		$28,891			$28,828			$28,835			$28,752			$28,572			$319		1	%
Brokered Deposits and Other Deposits	17,096			16,755			15,810			15,638			16,280			816			5	%
Total Interest-bearing Deposits	45,987			45,583			44,645			44,390			44,852			1,135			3	%
Short-term Borrowings	126			107			129			113			93			33			35	%
Securitized Borrowings	17,220			17,219			16,535			15,976			17,014			206			1	%
Other Long-term Borrowings	5,307			4,950			4,341			3,889			3,572			1,735			49	%
Total Interest-bearing Liabilities	68,640			67,859			65,650			64,368			65,531			3,109			5	%
Other Liabilities & Stockholders' Equity	14,947			14,826			14,735			14,614			14,301			646			5	%
Total Liabilities and Stockholders' Equity		$83,587			$82,685			$80,385			$78,982			$79,832			$3,755		5	%
AVERAGE RATES
Assets
Cash and Investment Securities	0.62		%	0.72		%	0.80		%	0.76		%	0.75		%	(13		)	bps
Restricted Cash	0.11		%	0.10		%	0.09		%	0.08		%	0.08		%	3			bps
Credit Card Loans	12.05		%	12.08		%	12.04		%	12.10		%	12.14		%	(9		)	bps
Private Student Loans	6.95		%	6.85		%	6.82		%	6.84		%	6.85		%	10			bps
Personal Loans	12.19		%	12.25		%	12.21		%	12.49		%	12.54		%	(35		)	bps
Other Loans	4.23		%	3.78		%	3.83		%	3.69		%	3.27		%	96			bps
Total Loans	11.37		%	11.40		%	11.36		%	11.42		%	11.44		%	(7		)	bps
Total Interest Earning Assets	9.67		%	9.78		%	9.83		%	9.79		%	9.62		%	5			bps
Liabilities and Stockholders' Equity
Direct to Consumer and Affinity Deposits	1.25		%	1.26		%	1.26		%	1.27		%	1.29		%	(4		)	bps
Brokered Deposits and Other Deposits	1.50		%	1.53		%	1.54		%	1.54		%	1.54		%	(4		)	bps
Total Interest-bearing Deposits	1.34		%	1.36		%	1.36		%	1.37		%	1.38		%	(4		)	bps
Short-term Borrowings	1.43		%	1.54		%	1.42		%	1.60		%	1.90		%	(47		)	bps
Securitized Borrowings	1.89		%	1.88		%	1.82		%	1.74		%	1.67		%	22			bps
Other Long-term Borrowings	5.11		%	5.09		%	5.28		%	5.54		%	5.24		%	(13		)	bps
Total Interest-bearing Liabilities	1.77		%	1.77		%	1.74		%	1.71		%	1.67		%	10			bps
Net Interest Margin	9.69		%	9.76		%	9.78		%	9.84		%	9.87		%	(18		)	bps
Net Yield on Interest-earning Assets	8.17		%	8.28		%	8.36		%	8.35		%	8.21		%	(4		)	bps
Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES
LOAN STATISTICS
(unaudited, in millions)
	Quarter Ended
	Mar 31, 2015			Dec 31, 2014			Sep 30, 2014			Jun 30, 2014			Mar 31, 2014			March 31, 2015 vs. March 31, 2014
TOTAL LOAN RECEIVABLES
Ending Loans 1, 2		$67,648			$69,969			$67,366			$65,875			$63,852			$3,796		6	%
Average Loans 1, 2		$68,148			$67,930			$66,481			$64,728			$64,227			$3,921		6	%
Interest Yield	11.37		%	11.40		%	11.36		%	11.42		%	11.44		%	(7		)	bps
Gross Principal Charge-off Rate	2.82		%	2.70		%	2.63		%	2.82		%	2.82		%	—			bps
Gross Principal Charge-off Rate excluding PCI Loans 3	2.98		%	2.86		%	2.79		%	3.01		%	3.01		%	(3		)	bps
Net Principal Charge-off Rate	2.14		%	2.06		%	1.94		%	2.08		%	2.08		%	6			bps
Net Principal Charge-off Rate excluding PCI Loans 3	2.26		%	2.18		%	2.06		%	2.22		%	2.22		%	4			bps
Delinquency Rate (over 30 days) excluding PCI Loans 3,4	1.57		%	1.66		%	1.64		%	1.56		%	1.65		%	(8		)	bps
Delinquency Rate (over 90 days) excluding PCI Loans 3,4	0.78		%	0.78		%	0.75		%	0.73		%	0.80		%	(2		)	bps
Gross Principal Charge-off Dollars		$474			$463			$440			$455			$447			$27		6	%
Net Principal Charge-off Dollars		$360			$355			$324			$337			$329			$31		9	%
Net Interest and Fee Charge-off Dollars		$95			$91			$85			$87			$89			$6		7	%
Loans Delinquent Over 30 Days 3,4		$1,006			$1,100			$1,043			$964			$985			$21		2	%
Loans Delinquent Over 90 Days 3,4		$500			$517			$476			$451			$478			$22		5	%
Allowance for Loan Loss (period end)		$1,776			$1,746			$1,644			$1,614			$1,591			$185		12	%
Change in Loan Loss Reserves		$30			$102			$30			$23			($57	)		$87		153	%
Reserve Rate	2.63		%	2.50		%	2.44		%	2.45		%	2.49		%	14			bps
Reserve Rate Excluding PCI Loans 3	2.72		%	2.59		%	2.54		%	2.56		%	2.61		%	11			bps
CREDIT CARD LOANS
Ending Loans		$53,499			$56,128			$53,699			$52,742			$50,879			$2,620		5	%
Average Loans		$54,038			$54,168			$53,130			$51,718			$51,347			$2,691		5	%
Interest Yield	12.05		%	12.08		%	12.04		%	12.10		%	12.14		%	(9		)	bps
Gross Principal Charge-off Rate	3.21		%	3.03		%	2.99		%	3.22		%	3.22		%	(1		)	bps
Net Principal Charge-off Rate	2.40		%	2.26		%	2.16		%	2.33		%	2.32		%	8			bps
Delinquency Rate (over 30 days) 4	1.64		%	1.73		%	1.71		%	1.63		%	1.72		%	(8		)	bps
Delinquency Rate (over 90 days) 4	0.86		%	0.85		%	0.82		%	0.80		%	0.87		%	(1		)	bps
Gross Principal Charge-off Dollars		$428			$413			$400			$415			$408			$20		5	%
Net Principal Charge-off Dollars		$319			$309			$289			$300			$294			$25		9	%
Loans Delinquent Over 30 Days 4		$879			$971			$920			$860			$876			$3		0	%
Loans Delinquent Over 90 Days 4		$458			$480			$440			$420			$442			$16		4	%
Allowance for Loan Loss (period end)		$1,492			$1,474			$1,388			$1,359			$1,342			$150		11	%
Change in Loan Loss Reserves		$18			$86			$29			$17			($64	)		$82		128	%
Reserve Rate	2.79		%	2.63		%	2.58		%	2.58		%	2.64		%	15			bps
Total Discover Card Volume		$28,725			$33,211			$32,091			$31,732			$28,077			$648		2	%
Discover Card Sales Volume		$26,379			$30,871			$29,609			$29,341			$25,697			$682		3	%
Rewards Rate	1.02		%	1.67		%	1.03		%	0.91		%	1.03		%	(1		)	bps
1 Total Loans includes mortgages and other loans
2 Purchased Credit Impaired ("PCI") loans are loans that were acquired in which a deterioration in credit quality occurred between the origination date and the acquisition date. These loans were initially recorded at fair value and accrete interest income over the estimated lives of the loans as long as cash flows are reasonably estimable, even if the loans are contractually past due. PCI loans are private student loans and are included in total loan receivables
3 Excludes PCI loans (described above) which are accounted for on a pooled basis. Since a pool is accounted for as a single asset with a single composite interest rate and aggregate expectation of cash flows, the past-due status of a pool, or that of the individual loans within a pool, is not meaningful. Because the Company is recognizing interest income on a pool of loans, it is all considered to be performing
4 During the first quarter of 2015, a payment processing change was implemented which had the effect of contributing favorably to the delinquencies of certain accounts. These changes partially contributed to the decline in the delinquency rate
Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES
LOAN STATISTICS
(unaudited, in millions)
	Quarter Ended
	Mar 31, 2015			Dec 31, 2014			Sep 30, 2014			Jun 30, 2014			Mar 31, 2014			March 31, 2015 vs. March 31, 2014
PRIVATE STUDENT LOANS
Ending Loans		$8,696			$8,510			$8,494			$8,251			$8,372			$324		4	%
Ending PCI Loans 1		$3,519			$3,660			$3,788			$3,915			$4,046			($527	)	(13	%)
Interest Yield	6.95		%	6.85		%	6.82		%	6.84		%	6.85		%	10			bps
Net Principal Charge-off Rate	0.61		%	0.79		%	0.61		%	0.68		%	0.67		%	(6		)	bps
Net Principal Charge-off Rate excluding PCI Loans 2	1.03		%	1.40		%	1.14		%	1.30		%	1.31		%	(28		)	bps
Delinquency Rate (over 30 days) excluding PCI Loans 2	1.66		%	1.80		%	1.78		%	1.66		%	1.79		%	(13		)	bps
Reserve Rate	1.63		%	1.59		%	1.56		%	1.55		%	1.45		%	18			bps
Reserve Rate excluding PCI Loans 2	2.18		%	2.20		%	2.21		%	2.29		%	2.16		%	2			bps
PERSONAL LOANS
Ending Loans		$5,065			$5,007			$4,830			$4,579			$4,310			$755		18	%
Interest Yield	12.19		%	12.25		%	12.21		%	12.49		%	12.54		%	(35		)	bps
Net Principal Charge-off Rate	2.22		%	2.20		%	1.92		%	1.95		%	2.07		%	15			bps
Delinquency Rate (over 30 days)	0.76		%	0.79		%	0.75		%	0.66		%	0.68		%	8			bps
Reserve Rate	2.43		%	2.40		%	2.23		%	2.37		%	2.52		%	(9		)	bps
1 Purchased Credit Impaired ("PCI") loans are loans that were acquired in which a deterioration in credit quality occurred between the origination date and the acquisition date. These loans were initially recorded at fair value and accrete interest income over the estimated lives of the loans as long as cash flows are reasonably estimable, even if the loans are contractually past due. PCI loans are private student loans and are included in total loan receivables
2 Excludes PCI loans (described above) which are accounted for on a pooled basis. Since a pool is accounted for as a single asset with a single composite interest rate and aggregate expectation of cash flows, the past-due status of a pool, or that of the individual loans within a pool, is not meaningful. Because the Company is recognizing interest income on a pool of loans, it is all considered to be performing
Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES
SEGMENT RESULTS
(unaudited, in millions)
	Quarter Ended
	Mar 31, 2015			Dec 31, 2014			Sep 30, 2014			Jun 30, 2014			Mar 31, 2014			March 31, 2015 vs. March 31, 2014
DIRECT BANKING
Interest Income		$1,929			$1,974			$1,926			$1,863			$1,833			$96		5	%
Interest Expense	300			302			288			274			270			30			11	%
Net Interest Income	1,629			1,672			1,638			1,589			1,563			66			4	%
Other Income	468			286			475			503			436			32			7	%
Revenue Net of Interest Expense	2,097			1,958			2,113			2,092			1,999			98			5	%
Provision for Loan Losses	388			454			356			360			270			118			44	%
Total Other Expense	828			858			776			748			735			93			13	%
Income Before Income Taxes		$881			$646			$981			$984			$994			($113	)	(11	%)
Net Interest Margin	9.70		%	9.77		%	9.79		%	9.85		%	9.88		%	(18		)	bps
Pretax Return on Loan Receivables	5.24		%	3.78		%	5.86		%	6.10		%	6.29		%	(105		)	bps
PAYMENT SERVICES
Interest Income		$—			$—			$—			$—			$—			$—		NM
Interest Expense	—			—			—			—			—			—			NM
Net Interest Income	—			—			—			—			—			—			NM
Other Income	74			79			77			80			79			(5		)	(6	%)
Revenue Net of Interest Expense	74			79			77			80			79			(5		)	(6	%)
Provision for Loan Losses	2			3			(2		)	—			2			—			0%
Total Other Expense	45			74			51			49			49			(4		)	(8	%)
Income Before Income Taxes		$27			$2			$28			$31			$28			($1	)	(4	%)
Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES

GLOSSARY OF FINANCIAL TERMS

Book Value per share represents total equity divided by ending common shares outstanding

Common Equity Tier 1 Capital Ratio (Basel III transition) represents common equity tier 1 capital divided by risk weighted assets calculated under Basel III rules subject to transition provisions

Common Equity Tier 1 Capital Ratio (Basel III fully phased-in) represents fully phased-in common equity tier 1 capital divided by risk weighted assets under fully phased-in Basel III rules. The Common Equity Tier 1 Capital Ratio (Basel III fully phased-in) is calculated using Basel III fully phased-in common equity tier 1 capital, a non-GAAP measure. The Company believes that the common equity tier 1 capital ratio based on fully phased-in Basel III rules is an important complement to the existing capital ratios and for comparability to other financial institutions. For the corresponding reconciliation of common equity tier 1 capital and risk weighted assets calculated under fully phased-in Basel III rules to common equity tier 1 capital and risk weighted assets calculated under Basel III transition rules see the Reconciliation of GAAP to non-GAAP data schedule

Delinquency Rate (Over 30 Days) represents loans delinquent over thirty days divided by ending loans (total or respective loans, as appropriate)

Delinquency Rate (Over 90 Days) represents loans delinquent over ninety days divided by ending loans (total or respective loans, as appropriate)

Earnings Per Share represents net income allocated to common stockholders divided by the weighted average common shares outstanding

Effective Tax Rate represents tax expense divided by income before income taxes

Gross Principal Charge-off Rate represents gross principal charge-off dollars (annualized) divided by average loans for the reporting period

Interest Yield represents interest income on loan receivables (annualized) divided by average loans for the reporting period

Liquidity Portfolio represents cash and cash equivalents (excluding cash-in-process) and other investments

Net Income Allocated to Common Stockholders represents net income less (i) dividends and accretion of discount on shares of preferred stock and (ii) income allocated to participating securities

Net Interest Margin represents net interest income (annualized) divided by average total loans for the period.

Net Principal Charge-off Rate represents net principal charge-off dollars (annualized) divided by average loans for the reporting period

Operating Efficiency represents total other expense divided by revenue net of interest expense

Pretax Return on Loan Receivables represents income before income taxes (annualized) divided by total average loans for the period

Proprietary Network Volume represents gross proprietary sales volume on the Discover Network

Regulatory Capital Ratios are regulatory measures used to evaluate capital adequacy. Under Basel I, to be considered "well-capitalized," total risk-based, tier 1 risk-based, and tier 1 leverage ratios of 10%, 6% and 5% respectively must be maintained. Under Basel III, to be considered "well-capitalized," total risk-based, tier 1 risk-based, tier 1 leverage, and common equity tier 1 ratios of 10%, 8%, 5%, and 6.5% respectively must be maintained. As of January 1, 2015 regulatory capital ratios are calculated under Basel III rules subject to transition provisions. Prior to January 1, 2015 regulatory capital ratios are calculated under Basel I. Total Risk Based Capital Ratio represents total capital divided by risk-weighted assets. Tier 1 Capital Ratio represents tier 1 capital divided by risk-weighted assets. Tier 1 Leverage Ratio represents tier 1 capital divided by average total assets. The Tier 1 Common Capital Ratio has been replaced by the Common Equity Tier 1 Ratio under Basel III. Tier 1 Common Capital Ratio calculated under Basel I represents tier 1 common capital, a non-GAAP measure, divided by risk-weighted assets. For corresponding reconciliation of tier 1 common capital (Basel I) to a GAAP financial measure, see Reconciliation of GAAP to Non-GAAP Data schedule

Reserve Rate represents the allowance for loan losses divided by total loans

Return on Equity represents net income (annualized) divided by average total equity for the reporting period

Rewards Rate represents rewards cost divided by Discover Card sales volume

Tangible Assets represents total assets less goodwill and intangibles

Tangible Common Equity ("TCE"), a non-GAAP financial measure, represents total common equity less goodwill and intangibles. The Company believes TCE is a more meaningful measure to investors of the net asset value of the Company. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of GAAP to Non-GAAP Data schedule

Tangible Common Equity/Net Loans,a non-GAAP measure,represents total common equity less goodwill and intangibles divided by total loans less the allowance for loan loss (period end)

Tangible Common Equity per Share,a non-GAAP measure,represents total common equity less goodwill and intangibles divided by ending common shares outstanding

Tangible Common Equity/Tangible Assets, a non-GAAP measure,represents total common equity less goodwill and intangibles divided by total assets less goodwill and intangibles

Undrawn Credit Facilities represents asset-backed conduit funding facilities and Federal Reserve discount window (excluding investments pledged to the Federal Reserve, which are included within the liquidity investment portfolio)

DISCOVER FINANCIAL SERVICES
RECONCILIATION OF GAAP TO NON-GAAP DATA
(unaudited, in millions)
	Quarter Ended
	Mar 31, 2015			Dec 31, 2014			Sep 30, 2014			Jun 30, 2014			Mar 31, 2014
GAAP total common equity		$10,651			$10,574			$10,741			$10,821			$10,461
Less: Goodwill	(257		)	(257		)	(284		)	(284		)	(284		)
Less: Intangibles	(175		)	(176		)	(177		)	(179		)	(182		)
Tangible common equity 1		$10,219			$10,141			$10,280			$10,358			$9,995
Effect of certain items in accumulated other comprehensive income (loss) excluded from tier 1 common capital				138			70			73			71
Total tier 1 common capital (Basel I) 2					$10,279			$10,350			$10,431			$10,066
Add: Adjustments related to capital components 3				26			21			N/A			N/A
Common equity Tier 1 capital (Basel III fully phased-in)					$10,305			$10,371		N/A			N/A
Common equity Tier 1 capital (Basel III transition)		$10,495
Adjustments related to capital components during transition 4	(88		)
Common equity Tier 1 capital (Basel III fully phased-in)		$10,407
Risk weighted assets (Basel I)	N/A				$72,889			$70,132			$68,755			$67,365
Risk weighted assets (Basel III transition)		$70,864		N/A			N/A			N/A			N/A
Risk weighted assets (Basel III fully phased-in) 5		$70,757			$73,315			$70,560		N/A			N/A
Tier 1 common capital ratio (Basel I) 6,7	N/A			14.1		%	14.8		%	15.2		%	14.9		%
Common equity Tier 1 capital ratio (Basel III transition) 6	14.8		%	N/A			N/A			N/A			N/A
Common equity Tier 1 capital ratio (Basel III fully phased-in) 6,8	14.7		%	14.1		%	14.7		%	N/A			N/A
GAAP book value per share		$25.22			$24.79			$24.82			$24.46			$23.53
Less: Goodwill	(0.58		)	(0.57		)	(0.62		)	(0.62		)	(0.60		)
Less: Intangibles	(0.39		)	(0.39		)	(0.39		)	(0.38		)	(0.39		)
Less: Preferred Stock	(1.26		)	(1.25		)	(1.23		)	(1.20		)	(1.20		)
Tangible common equity per share		$22.99			$22.58			$22.58			$22.26			$21.34
1 Tangible common equity ("TCE"), a non-GAAP financial measure, represents common equity less goodwill and intangibles. A reconciliation of TCE to common equity, a GAAP financial measure, is shown above. Other financial services companies may also use TCE and definitions may vary, so users of this information are advised to exercise caution in comparing TCE of different companies. TCE is included because management believes that common equity excluding goodwill and intangibles is a more meaningful measure to investors of the true net asset value of the Company
2 Tier 1 common capital (under Basel I), a non-GAAP financial measure, represents common equity and the effect of certain items in accumulated other comprehensive income (loss) excluded from tier 1 common capital, less goodwill and intangibles. A reconciliation of tier 1 common capital to common equity, a GAAP financial measure, is shown above. Other financial services companies may also use tier 1 common capital and definitions may vary, so users of this information are advised to exercise caution in comparing tier 1 common capital of different companies. Tier 1 common capital is included to support the tier 1 common capital ratio which is meaningful to investors to assess the quality and composition of the Company’s capital
3 Adjustments related to capital components for fully phased-in Basel III include deferred tax liabilities related to intangible assets and deduction for deferred tax assets
4 Adjustments related to capital components for fully phased-in Basel III include the phase-in of the intangible asset exclusion
5 Key differences under fully phased-in Basel III rules in the calculation of risk-weighted assets include higher risk weighting for past due loans and unfunded commitments
6 As of January 1, 2015 regulatory capital ratios are calculated under Basel III rules subject to transition provisions. The Company reported under Basel I at December 31, 2014, September 30, 2014, June 30, 2014 and March 31, 2014
7 Tier 1 common capital ratio is calculated using tier 1 common capital (Basel I), a non-GAAP measure, divided by risk weighted assets (Basel I)
8 Common equity tier 1 capital ratio (Basel III fully phased-in) is calculated using common equity tier 1 capital (Basel III fully phased-in), a non-GAAP measure, divided by risk weighted assets (Basel III fully phased-in)
Note: See Glossary of Financial Terms for definitions of financial terms

EX-99.3

April 21, 2015 ©2015 DISCOVER FINANCIAL SERVICES 1Q15 Financial Results Exhibit 99.3

Notice The following slides are part of a presentation by Discover Financial Services (the "Company") in connection with reporting quarterly financial results and are intended to be viewed as part of that presentation. No representation is made that the information in these slides is complete. For additional financial, statistical, and business related information, as well as information regarding business and segment trends, see the earnings release and financial supplement included as exhibits to the Company’s Current Report on Form 8-K filed today and available on the Company’s website (www.discover.com) and the SEC’s website (www.sec.gov). The information provided herein includes certain non-GAAP financial measures. The reconciliations of such measures to the comparable GAAP figures are included at the end of this presentation, which is available on the Company’s website and the SEC’s website. The presentation contains forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made, which reflect management’s estimates, projections, expectations or beliefs at that time, and which are subject to risks and uncertainties that may cause actual results to differ materially. For a discussion of certain risks and uncertainties that may affect the future results of the Company, please see "Special Note Regarding Forward-Looking Statements," "Risk Factors," "Business – Competition," "Business – Supervision and Regulation" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 which is filed with the SEC and available at the SEC's website (www.sec.gov). The Company does not undertake to update or revise forward-looking statements as more information becomes available. 2

B / (W) ($MM, except per share data) 1Q15 1Q14 $ Δ % Δ Revenue Net of Interest Expense $2,171 $2,078 $93 4% Provision for Loan Losses 390 272 (118) (43%) Operating Expense 873 784 (89) (11%) Direct Banking 881 994 (113) (11%) Payment Services 27 28 (1) (4%) Total Pre-Tax Income 908 1,022 (114) (11%) Pre-tax, Pre-Provision Income (1) 1,298 1,294 4 0% Income Tax Expense 322 391 69 18% Net Income $586 $631 ($45) (7%) Diluted EPS $1.28 $1.31 ($0.03) (2%) ROE 21% 23% 1Q15 Summary Financial Results • Diluted EPS of $1.28, down 2% YOY • Revenue net of interest expense of $2.2Bn, up 4% YOY primarily due to loan growth, higher direct mortgage related income and higher interchange revenue • Provision for loan losses increased $118MM, or 43% due primarily to a $30MM reserve build versus a reserve release in the prior year • Expenses increased $89MM, or 11% primarily due to higher professional fees including anti-money laundering and related compliance program enhancements as well as increased compensation, marketing spend and legal reserves 3 Note(s) 1. Pre-tax, pre-provision income, which is derived by adding provision for loan losses to pre-tax income, is a non-GAAP financial measure which should be viewed in addition to, and not as a substitute for, the Company’s reported results. Management believes this information helps investors understand the effect of provision for loan losses on reported results and provides an alternate presentation of the Company’s performance; see appendix for a reconciliation

1Q14 1Q15 80 70 60 50 40 30 20 10 0 $63.9 $50.9 $8.4 $4.3 $67.6 $53.5 $8.7 $5.1 1Q14 1Q15 50 40 30 20 10 0 $26.5 $41.9 $6.5 $2.4 $27.3 $40.8 $6.5 $2.9 1Q15 Loan and Volume Growth 4 Volume ($Bn)Ending Loans ($Bn) Note(s) 1. Volume is derived from data provided by licensees for Diners Club branded cards issued outside of North America and is subject to subsequent revision or amendment Total +5.9% Card +5.1% Student +3.9% Personal +17.5% PULSE -2.7% Diners(1) -0.8% Network Partners +23.9% Proprietary +2.9% Total Payments Volume flat YOY

1Q15 Revenue Detail • Net interest income of $1.6Bn, up 4% YOY due primarily to loan growth • Discount and interchange revenue of $536MM, up 3% YOY driven primarily by an increase in card sales • Rewards rate declined by 1bp YOY and decreased significantly from 4Q14 which included the elimination of the rewards forfeiture reserve • Protection products revenue of $71MM, down 14% YOY due to the prior suspension of new product sales • Other income increased by $29MM primarily due to higher direct mortgage related income Note(s) 1. Rewards cost divided by Discover card sales volume 5 B / (W) ($MM) 1Q15 1Q14 $ Δ % Δ Interest Income $1,929 $1,833 $96 5% Interest Expense 300 270 (30) (11%) Net Interest Income 1,629 1,563 66 4% Discount/Interchange Revenue 536 519 17 3% Rewards Cost 268 265 (3) (1%) Net Discount/Interchange Revenue 268 254 14 6% Protection Products Revenue 71 83 (12) (14%) Loan Fee Income 81 83 (2) (2%) Transaction Processing Revenue 42 44 (2) (5%) Other Income 80 51 29 57% Total Non-Interest Income 542 515 27 5% Revenue Net of Interest Expense $2,171 $2,078 $93 4% Direct Banking $2,097 $1,999 $98 5% Payment Services 74 79 (5) (6%) Revenue Net of Interest Expense $2,171 $2,078 $93 4% Change ($MM) 1Q15 1Q14 QOQ YOY Discover Card Sales Volume $26,379 $25,697 (15%) 3% Rewards Rate (1) 1.02% 1.03% -65 bps -1 bps

1Q15 Net Interest Margin 6 • Total interest yield of 11.37% decreased 7bps YOY driven primarily by lower card yield • Credit card yield decreased 9bps YOY due to portfolio mix • Funding costs on interest-bearing liabilities increased 10bps YOY to 1.77% due primarily to higher fixed rate debt issuances • Net interest margin on receivables decreased 18bps YOY due to lower total yield and higher funding costs Change (%) 1Q15 QOQ YOY Total Interest Yield 11.37% -3 bps -7 bps NIM on Receivables 9.69% -7 bps -18 bps NIM on Interest-Earning Assets 8.17% -11 bps -4 bps 1Q15 1Q14 ($MM) Average Balance Rate Average Balance Rate Credit Card $54,038 12.05% $51,347 12.14% Private Student 8,721 6.95% 8,377 6.85% Personal 5,047 12.19% 4,259 12.54% Home Loans and Other 342 4.23% 244 3.27% Total Loans 68,148 11.37% 64,227 11.44% Other Interest-Earning Assets 12,753 0.59% 13,012 0.66% Total Interest-Earning Assets $80,901 9.67% $77,239 9.62% Direct to Consumer and Affinity $28,891 1.25% $28,572 1.29% Brokered Deposits and Other 17,096 1.50% 16,280 1.54% Interest Bearing Deposits 45,987 1.34% 44,852 1.38% Borrowings 22,653 2.64% 20,679 2.29% Total Interest-Bearing Liabilities $68,640 1.77% $65,531 1.67%

B / (W) ($MM) 1Q15 1Q14 $ Δ % Δ Employee Compensation and Benefits $331 $307 ($24) (8%) Marketing and Business Development 182 169 (13) (8%) Information Processing & Communications 88 84 (4) (5%) Professional Fees 127 99 (28) (28%) Premises and Equipment 24 23 (1) (4%) Other Expense 121 102 (19) (19%) Total Operating Expense $873 $784 ($89) (11%) Direct Banking $828 $735 ($93) (13%) Payment Services 45 49 4 8% Total Operating Expense $873 $784 ($89) (11%) Operating Efficiency (1) 40.2% 37.7% -248 bps Adjusted Operating Efficiency (2) 38.6% 37.7% -87 bps 1Q15 Operating Expense Detail 7 • Employee compensation and benefits of $331MM, up 8% YOY primarily due to higher headcount and higher salaries & commissions • Marketing and business development expense of $182MM, up 8% YOY due to higher advertising and marketing for card and personal loans • Professional fees of $127MM, up 28% YOY due in part to costs related to anti-money laundering and related compliance program enhancements • Other expense of $121MM, up 19% YOY largely due to a $20MM addition to legal reserves Note(s) 1. Defined as reported total operating expense divided by revenue net of interest expense 2. Operating efficiency adjusted for $15 million anti-money laundering and related compliance program expenses and $20 million legal reserve addition in 1Q15; see appendix for a reconciliation. Management believes adjusted operating efficiency, which is a non-GAAP measure, provides investors with a useful metric to evaluate the ongoing operating performance of the company

1Q15 Provision for Loan Losses and Credit Quality 8 • Net charge-offs of $360MM, up 9% YOY and reserve build of $30MM both primarily due to loan growth • Card net charge-off rate increased 8bps YOY to 2.40% • Card 30+ day delinquency rate of 1.64% decreased 8bps YOY • Student loan net charge-off rate excluding PCI loans of 1.03%, down 28bps YOY • Personal loan net charge-off rate of 2.22%, up 15bps YOY Note(s) 1. During the first quarter of 2015, a payment processing change was implemented which had the effect of contributing favorably to the delinquencies of certain accounts. These changes partially contributed to the decline in the delinquency rate 2. Excludes PCI loans which are accounted for on a pooled basis. Since a pool is accounted for as a single asset with a single composite interest rate and aggregate expectation of cash flows, the past-due status of a pool, or that of the individual loans within a pool, is not meaningful. Because the Company is recognizing interest income on a pool of loans, it is all considered to be performing B / (W) ($MM) 1Q15 1Q14 $ Δ % Δ Net Principal Charge-Off $360 $329 ($31) (9%) Reserve Changes build/(release) 30 (57) (87) (153%) Total Provision for Loan Loss $390 $272 ($118) (43%) Change (%) 1Q15 QOQ YOY Credit Card Loans Gross Principal Charge-Off Rate 3.21% 18 bps -1 bps Net Principal Charge-Off Rate 2.40% 14 bps 8 bps 30-Day Delinquency Rate (1) 1.64% -9 bps -8 bps Reserve Rate 2.79% 16 bps 15 bps Private Student Loans Net Principal Charge-Off Rate (excl. PCI Loans)(2) 1.03% -37 bps -28 bps 30-Day Delinquency Rate (excl. PCI Loans)(2) 1.66% -14 bps -13 bps Reserve Rate (excl. PCI Loans)(2) 2.18% -2 bps 2 bps Personal Loans Net Principal Charge-Off Rate 2.22% 2 bps 15 bps 30-Day Delinquency Rate 0.76% -3 bps 8 bps Reserve Rate 2.43% 3 bps -9 bps Total Loans Gross Principal Charge-Off Rate (excl. PCI Loans)(2) 2.98% 12 bps -3 bps Net Principal Charge-Off Rate (excl. PCI Loans)(2) 2.26% 8 bps 4 bps 30-Day Delinquency Rate (excl. PCI Loans) (1,2) 1.57% -9 bps -8 bps Reserve Rate (excl. PCI Loans) (2) 2.72% 13 bps 11 bps

Capital Position 9 Note(s) 1. As of January 1, 2015 regulatory capital ratios are calculated under Basel III rules subject to transition provisions. The Company reported under Basel I at December 31, 2014 and March 31, 2014 2. Tier 1 Common Capital Ratio (under Basel I) is calculated using tier 1 common capital, a non-GAAP measure. The Company believes the tier 1 common capital ratio is meaningful to investors to assess the quality and composition of the Company’s capital. See appendix for a reconciliation 3. Common Equity Tier 1 Capital Ratio (Basel III fully phased-in) is calculated using Basel III fully phased-in common equity tier 1 capital, a non-GAAP measure. The Company believes that the common equity tier 1 capital ratio based on fully phased-in Basel III rules is an important complement to the existing capital ratios and for comparability to other financial institutions. For the corresponding reconciliation of common equity tier 1 capital and risk weighted assets calculated under fully phased-in Basel III rules to common equity tier 1 capital and risk weighted assets calculated under Basel III transition rules see appendix Capital Ratios • Received non-objection from Federal Reserve for proposed capital actions from 4/1/15 through 6/30/16 - Increased quarterly common dividend from $0.24 to $0.28 per share on 4/16/15 - Plan to repurchase up to $2.2Bn of common stock through the five quarters Basel III Transition Basel I 1Q15 4Q14 1Q14 Total Risk Based Capital Ratio (1) 17.6% 17.0% 18.1% Tier 1 Risk Based Capital Ratio (1) 15.6% 14.9% 15.8% Tier 1 Common Capital Ratio(1,2) N/A 14.1% 14.9% Tier 1 Leverage Ratio (1) 13.3% 13.2% 13.4% Common Equity Tier 1 Capital Ratio(1) 14.8% N/A N/A Basel III Fully Phased-in Common Equity Tier 1 Capital Ratio (3) 14.7% 14.1% N/A

Appendix

Reconciliation of GAAP to Non-GAAP Data Note(s) 1. Pre-tax, pre-provision income, which is derived by adding provision for loan losses to pre-tax income, is a non-GAAP financial measure which should be viewed in addition to, and not as a substitute for, the company's reported results. Management believes this information helps investors understand the effect of provision for loan losses on reported results and provides an alternate presentation of the Company's performance 2. Adjusted operating efficiency is calculated using adjusted operating expense, a non-GAAP measure, divided by revenue net of interest expense. Management believes this information provides investors with a useful metric to evaluate the ongoing operating performance of the Company 11 Quarter Ended (unaudited, in millions) Mar 31, 2015 Mar 31, 2014 Provision for loan losses $390 $272 Income before income taxes 908 1,022 Pre-tax, pre-provision income (1) $1,298 $1,294 Revenue net of interest expense $2,171 $2,078 Total operating expense 873 784 Excluding legal reserve addition 20 — Excluding anti-money laundering and related compliance program expenses 15 — Adjusted operating expense $838 $784 Adjusted operating efficiency (2) 38.6% 37.7%

Reconciliation of GAAP to Non-GAAP Data (cont'd) Quarter Ended (unaudited, in millions) Mar 31, 2015 Dec 31, 2014 Mar 31, 2014 Note(s) 1. Tangible common equity ("TCE"), a non-GAAP financial measure, represents common equity less goodwill and intangibles. A reconciliation of TCE to common equity, a GAAP financial measure, is shown above. Other financial services companies may also use TCE and definitions may vary, so users of this information are advised to exercise caution in comparing TCE of different companies. TCE is included because management believes that common equity excluding goodwill and intangibles is a more meaningful measure to investors of the true net asset value of the Company 2. Tier 1 common capital (under Basel I), a non-GAAP financial measure, represents common equity and the effect of certain items in accumulated other comprehensive income (loss) excluded from tier 1 common capital, less goodwill and intangibles. A reconciliation of tier 1 common capital to common equity, a GAAP financial measure, is shown above. Other financial services companies may also use tier 1 common capital and definitions may vary, so users of this information are advised to exercise caution in comparing tier 1 common capital of different companies. Tier 1 common capital is included to support the tier 1 common capital ratio which is meaningful to investors to assess the quality and composition of the Company’s capital 3. Adjustments related to capital components for fully phased-in Basel III include deferred tax liabilities related to intangible assets and deduction for deferred tax assets 4. Adjustments related to capital components for fully phased-in Basel III include the phase-in of the intangible asset exclusion 5. Key differences under fully phased-in Basel III rules in the calculation of risk-weighted assets include higher risk weighting for past due loans and unfunded commitments 6. As of January 1, 2015 regulatory capital ratios are calculated under Basel III rules subject to transition provisions. The Company reported under Basel I at December 31, 2014 and March 31, 2014 7. Tier 1 common capital ratio is calculated using tier 1 common capital (Basel I), a non-GAAP measure, divided by risk weighted assets (Basel I) 8. Common equity tier 1 capital ratio (Basel III fully phased-in) is calculated using common equity tier 1 capital (Basel III fully phased-in), a non-GAAP measure, divided by risk weighted assets (Basel III fully phased-in) 12 GAAP total common equity $10,651 $10,574 $10,461 Less: Goodwill (257) (257) (284) Less: Intangibles (175) (176) (182) Tangible common equity(1) $10,219 $10,141 $9,995 Effect of certain items in accumulated other comprehensive income (loss) excluded from tier 1 common capital 138 71 Total tier 1 common capital (Basel I)(2) $10,279 $10,066 Add: Adjustments related to capital components(3) 26 N/A Common equity Tier 1 capital (Basel III fully phased-in) $10,305 N/A Common equity Tier 1 capital (Basel III transition) $10,495 Adjustments related to capital components during transition(4) (88) Common equity Tier 1 capital (Basel III fully phased-in) $10,407 Risk weighted assets (Basel I) N/A $72,889 $67,365 Risk weighted assets (Basel III transition) $70,864 N/A N/A Risk weighted assets (Basel III fully phased-in) (5) $70,757 $73,315 N/A Tier 1 common capital ratio (Basel I)(6,7) N/A 14.1% 14.9% Common equity Tier 1 capital ratio (Basel III transition)(6) 14.8% N/A N/A Common equity Tier 1 capital ratio (Basel III fully phased-in)(6,8) 14.7% 14.1% N/A